A unique characteristic of the hepatitis B virus is the production of a secreted form (precore or HBeAg) of the structural nucleocapsid (core or HBcAg). By using T cell receptor (TCR) transgenic (Tg) and TCR ؋ HBc͞HBeAg double-and triple-Tg pairs, we demonstrate that HBeAg elicits T cell tolerance, whereas HBcAg is nontolerogenic in this system. In fact, TCR ؋ HBc double-Tg mice spontaneously seroconvert to IgG anti-HBc positivity at an early age. However, the presence of HBeAg in the serum of TCR ؋ HBc ؋ HBe triple-Tg mice prevents anti-HBc seroconversion. HBeAg mediates its immunoregulatory effect by eliciting tolerance in HBc͞HBeAg-specific T cells. The results suggest that hepadnaviruses have retained a secretory form of the nucleoprotein because it functions as a T cell tolerogen and regulates the immune response to the intracellular nucleocapsid. This HBeAg-mediated immune regulation may predispose to chronicity during perinatal infections and prevent severe liver injury during adult infections.